A. CIRCULARS
(i) Clarifications – Procedure for review, revision and appeal Circular no.250/07/2025-GST dated 24.06.2025.
By above circular, clarifications about procedure for review, revision and appeal in respect of Orders-in-Original (O-I-Os) passed by Common Adjudicating Authorities (CAA), i.e., Joint/Additional Commissioners appointed for adjudicating SCNs issued by DGGI under GST are provided.
B. ADVISORY
i) Vide GSTN dated 16.6.2025, the information about introduction of Enhanced Inter-operable Services between E-way Bill portals is provided.
ii) Vide GSTN dated 18.6.2025, the information about Advisory to file pending returns before expiry of three years is provided.
iii) Vide GSTN dated 19.6.2025, the information about handling of inadvertently rejected records on IMS is provided.
C. ADVANCE RULINGS
EPC Contract – Divisible vis-à-vis indivisible contract Thyssenkrupp Industrial Solutions (India) Pvt. Ltd. (Now known as Thyssenkrupp UHDE India Pvt. Ltd.)
(AR Order No. GUJ/GAAR/R/2023/01 (in Appl. No. Advance Ruling/SGST&CGST/2023/AR/29) dated: 29.01.2025) (Guj)
The applicant is engaged in Engineering, Procurement and Construction (‘EPC’) jobs, as well as Engineering, Procurement and Construction Management services in the areas of Ammonia Storages, Nitric Acid, Urea, DMT etc. and is also involved in the setting up of Chlor Alkali plants, Hydrogen plants, Nitric Acid plants etc.
The applicant has undertaken a bid of IOCL for execution of EPC package (EPCC-09) for Catalytic De-Waxing Unit (‘CDWLP‘) for its Petrochemical and Lube Integration Project (‘LuPech’). As per tender the successful bidder is contractually obligated to execute the work on lump sum turnkey basis with single point responsibility.
The scope of EPC contract includes:
Supply of imported components on a high seas sale basis and
Clearance of imported goods for and on behalf of IOCL;
The acceptance letter issued by IOCL also clarified that the contract is for lump sum value including tax. It is provided that the imported goods should be sold to IOCL and the applicant should clear the same in the name of IOCL. IOCL was to pay applicable duty under Custom/IGST.
The applicant projected the above contract as a split contract in following components , though it is a single document.
It was the contention of applicant that since goods are sold on high seas sale (HSS) basis, it is sale simpliciter and hence cannot be part of works contract value.
With the above background, the applicant posed the following questions before ld. AAR.
“1. Whether the contract between the Applicant and IOCL is a divisible contract or a single and composite contract?
2. If the contract between the Applicant and IOCL is treated as an indivisible and a single composite contact whether the component imported goods will be taxable as a supply of goods at the time of importation or as a service at the time of incorporation in the works contract i.e. when the erection, commission and installation of goods takes place
3. When imported goods are sold by the supplier to a recipient on a high seas sale basis and such goods are cleared from customs by the recipient(as the importer on record) on payment of duty & Integrated Goods and Service Tax (under Section 5(1) of the Integrated Goods and Services Tax Act, 2017 read with Section 12 of the Customs Act and Section 3 of the Customs Tariff Act, and later such imported & duty paid goods are erected, commissioned and installed by the same supplier in such circumstances
[a] Whether a supply of goods can be subjected to GST twice, first as supply of goods at the time of importation in the hands of the recipient / importer and a second time as a component of supply of service in the hands of the supplier of FPC contract service at the time of incorporation of the imported goods in a works contract by way of erection, commission and installation?
[b] Whether the value of goods sold on a high seas can be added to the value of a works contract merely because such duty and IGST paid goods are incorporated in the works contract by way of erection, commission and installation.”
The ld. AAR referred to contract terms in detail along with relevant provisions under GST Act.
Regarding the contract of the applicant that the given contract is a split contract, the ld. AAR referred to judgment in case of Kone Elevator India Private Limited [2014 (304) E.L.T. 161 (S.C.) -2014-VIL-12-SC-CB] and held that the present turnkey EPC contract is a ‘works contract’. Since it is lump sum EPC contract, it cannot be divisible contract, though there are two separate work orders. The ld. AAR observed that both work orders are interdependent and cannot be performed independently.
Accordingly, the ld. AAR held that the impugned contract entered into by the applicant with IOCL is not a divisible contract.
So far as the question of tax liability on HSS of imported goods, the ld. AAR observed that it is not liable to GST in terms of Schedule III, read with section 7(2) of the CGST Act, 2017 as it is treated as neither a supply of goods nor a supply of services.
Regarding further question about the taxation of goods post HSS sale to IOCL, the ld. AAR observed that the said issue is not within the jurisdiction of its Authority, as it is a matter to be decided by the jurisdictional Customs Authority in terms of Customs Act, 1962 and Customs Tariff Act, 1975.
Regarding next question of taxability of HSS sale amount as a part of consideration for applicant, the ld. AAR relied upon Section 15 of the CGST Act, 2017.
The ld. AAR observed that what will be included and excluded in the value of supply is governed by sub-sections 15(2) & (3) of the CGST Act, 2017 and particularly sub-section 15(2). The ld. AAR held that the value of supply shall include any amount
that the supplier is liable to pay in relation to such supply which has been incurred by the recipient of the supply and not included in the price actually paid or payable for the goods or services or both. Since the applicant is having EPC contract, the applicant is liable to provide the goods [supplied on HSS basis to IOCL] and therefore the submission of applicant to not include such value in valuation is held untenable.
The ld. AAR relied upon judgment in case of M/s. Shree Jeet Transport – 2023-VIL-764-CHG [Writ Petition (1) No. 117/2022 decided on 17.10.2023].
The plea of double taxation also rejected by ld. AAR observing that what is supplied under the works contract is not the imported goods but EPC contract service.
The argument that since duty & IGST paid goods are incorporated in the works contract by way of erection, commission & installation and hence the said value cannot be included in valuation is rejected by the ld. AAR on ground that the contract is composite contract amounting to one transaction of supply of service.
Thus, all questions were decided against the applicant.
GTA – Scope
Tanuja Jangir
(AR Order No. RAJ/AAR/2024-25/21 dated: 21.11.2024) (Raj)
The applicant, M/s. IKTAI is a registered proprietorship concern intending to expand into a new business vertical focused on goods transport as a Goods Transport Agency (GTA). The Applicant is desirous of entering into agreement with other GTA’s (Principal GTA) for transportation of goods.
As per the draft agreement, the customers of principal GTA will award contract (referred as ‘‘Main Contract’) for transportation of goods. The principal GTA will issue consignment notes to its customers for transportation of goods.
Principal GTA will engage the applicant for transportation of goods. The applicant will be responsible to pick up the goods from the loading point and transport the goods to the designated unloading point, as per instructions of the principal GTA. The applicant will undertake the transport of goods on principal basis, i.e. he will issue and provide the principal GTA with a consignment note, for each transport, for transportation of goods.
Based on above facts the applicant has raised following issue before the ld. AAR.
“1. Whether the activity of the transportation of goods by the applicant will be exempted under entry No 18 of notification no 12/2017-Central Tax (Rate) dated 28.06.2017?”
Applicant’s main submission was that under GST, service by way of transportation of goods by road, other than GTA, is classified under Entry 18, Heading 9965 vide Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as amended from time to time. It was the submission that, the service by way of transportation of goods by road, is exempt except in following cases-
A goods transportation agency
A courier agency
It was contested that as GTA, the liability falls on recipient under RCM, unless a different option is opted by GTA.
The applicant drew attention to the meaning of GTA provided in Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 which is as under:
“4. Explanation. – For the purposes of this notification, –
(xxxx) ‘goods transport agency’ means, – any person who provides service in relation to transport of goods by road and issues consignment note, by whatever name called.”
The applicant explained that the use of phrase “in relation to” has extended the scope of the definition of GTA and it includes not only the actual transportation of goods but any intermediate/ancillary service provided in relation to such transportation, like loading or unloading, packing or unpacking, temporary warehousing etc. If these services are not provided as independent activities but are the means for successful provision of GTA service, then they are also covered under GTA. It was submitted that, in respect of those who provide agency services in transport, the liability is cast on recipient (RCM) in most of the cases, unless ¬option to pay under forward charge has been exercised by the GTA.
Based on above, applicant was contemplating exemption to its activity.
Considering meaning of the GTA, ld. AAR observed that issuance of the consignment note is an essential condition for any person to act as GTA. The ld. AAR further observed that if such a consignment note is not issued by the transporter, the service provider will not come within the ambit of GTA, as issue of consignment note indicates that the lien on the goods has been transferred to the transporter and the transporter becomes responsible for the goods till its safe delivery to the consignee.
The ld. AAR also explored the meaning of term “consignment note” based on available material including under erstwhile service tax and observed that in case of Consignment Note, the goods are received by the goods transport agency either from the consignor or the consignee of the goods, the details of which are mentioned in the consignment note along with the description of the goods being transported.
The ld. AAR observed that in present case the service of transportation of goods is sub-contracted to the applicant by the principal GTA meaning thereby the contract to undertake transportation of goods is provided by the consignee/consignor to principal GTA and not to the applicant. The ld. AAR also observed that because principal GTA deals with the consignee/ consignor directly, they also issue E-way bills and consignment notes. As per ld. AAR, the role of the applicant is to just provide their vehicles to principal GTA as and when called for and the applicant is giving only vehicles to principal GTA and thus it is principal GTA which has the transportation contract with the consignee/consignor.
The ld. AAR, therefore, opined that the transaction in this case would be one of renting of vehicles and not that of a Goods Transport Operator.
The ld. AAR further observed that issuance of consignment note to the consignor is an essential condition to qualify as a GTA and if entity only provides vehicles on rent or hire or other services for transport of goods for some consideration then it cannot be called a GTA, but an activity of ‘renting of vehicles’. It is reiterated that merely owning of trucks and renting them out for transportation of goods does not qualify in the definition of GTA. The ld. AAR held the applicant’s business activity is only of rental services of transport vehicles which are notified under notification no.11/2017-Central Tax (Rate) dated 28.06.2017.
Accordingly, the ld. AAR held that the applicant’s activity is not eligible for exemption under entry 18 of Notification no.12/2017-CT (R) dt.28.6.2017.
Classification – Icing Sugar
Ros Products
(AAR Order No. KER/8/2024 dated: 29.10.2024) (Ker)
The applicant filed advance ruling on the following questions:
1. What is the HSN code of Icing sugar?
2. What is the rate of GST on Icing sugar?
The applicant contended that in the market, Icing Sugar is being sold under the HSN code 1701 at the rate of 5% GST and also being sold under HSN code 1702 at the rate of 18% GST and therefore, in the AR application they have sought clarification about correct rate.
The applicant furnished the relevant portion from the FSSAI Regulations 2011, which specifies icing sugar as the sugar manufactured by pulverizing refined sugar or vacuum pan (planation white) sugar with or without edible starch. It was explained that edible starch, if added, shall be uniformly extended in the sugar. It was clarified that Icing Sugar shall be in form of white powder, free from dust, or any other extraneous matter.
The applicant further clarified that Icing Sugar is manufactured with grounded/pulverized sugar (HSN 1701) and maize starch (HSN 1108), where maize starch is not more than 4% by weight on dry basis of maize starch.
The ld. AAR observed that there are different kinds of sugars as provided in heading 17 as under:
The ld. AAR observed that while a specific classification is not provided for icing sugar, the icing sugar deserves the very same classification applicable to the sugar from which icing sugar is made. The ld. AAR observed that in case of applicant, icing sugar is manufactured from refined sugar (sucrose) pulverized with starch and not added with any colouring or flavouring materials. Accordingly, the ld. AAR held that the appropriate classification of the product should be under chapter/heading/sub-heading/Tariff item-1701 of the Customs Tariff Act 1975 with product description-Cane or beet sugar and chemically pure sucrose in solid form.
Justifying above classification, the ld. AAR also observed that being added with edible starch, it is composite product, but the ratio of refined sucrose and edible starch is 96.4% and presence of starch does not affect the essential character (taste) of sugar and therefore, the classification of the product goes with original sugar from which it is made. The ld. AAR held that the rate applicable will be 12% being covered by HSN Code 17019990.
Liability of Club – Principle of Mutuality
Umed Club
(AAR Order No. RAJ/AAR/2024-25/23 dated: 2.12.2024) (Raj)
The facts are that the applicant is a club registered under GST which is engaged in providing various services such as short-term accommodation, restaurant, recreational services.
The applicant intended to seek clarification on the applicability of GST on various services provided by club to its members in the light of the judgment of Supreme Court in case of State of West Bengal & others vs. Calcutta Club Limited in Civil Appeal no.4184 of 2009 (2019-VIL-34-SC-ST).
The applicant put forth analytical background of the above judgment.
The applicant also brought to notice the scope of Section 7 of CGST Act. The applicant has put forth following question:
“Whether service tax is payable on the services provided by clubs to its’ members?”
The question was originally decided by AR No. RAJ/AAR/2021-22/23 dated 27.09.2021-2022-VIL-54-AAR and it was decided against applicant.
Against the said AR, the appeal was filed before AAAR and vide order no. RAJ/AAAR/11/2023-24 dated 20.02.2024, the ld. AAAR set aside the above Ruling and remanded the matter back to the AAR to decide the application afresh on merits after considering all the questions posed by the applicant in their application dated 20.02.2024.
The ld. AAR observed that in light of judgment of Hon. Supreme Court in the case of State of West Bengal V/s Calcutta Club Limited in Civil Appeal No. 4184 of 2009 vide their Order dated 03.10.2019 -2019-VIL-34-SC-ST, no tax applied on its transactions with members due to principle of mutuality. The ld. AAR thereafter referred to amendments brought in GST Act vide Finance Act, 2021 dated 28.3.2021 which are also brought into force vide Notification No.39/2021-CT dated 21.12.2021 with retrospective effect from 1.7.2017.
The applicant also put forward the contention that as per Section 7(1)(A) and Schedule II of CGST / RGST Act, the Supply of Goods by the applicant Club to its member is only a taxable event under GST Act and not providing services.
The ld. AAR referred to definition of “person” in section 2(84) wherein, Clause (f) provides to include “(f) an association of persons or a body of individuals, whether incorporated or not, in India or outside India;” in category of person.
The ld. AAR further referred to Section 2(102) of CGST Act, which provides meaning of ‘services’ and also, section 7 giving ‘scope of supply’. The ld. AAR highlighted the amended part i.e. Clause (aa) in Section 7 which reads as under:
“(aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice versa, for cash, deferred payment or other valuable consideration.
Explanation. -For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another.”
The ld. AAR held that as per above legal provision, GST laws have expanded the scope of ‘supply’ to tax supplies between the club/association and its members as also to overcome the principle of mutuality. The ld. AAR held that the scope of supply clearly ascertains that the supply made by a person registered under GST is exigible to GST if it falls under section 7(1) of GST Act.
It further observed that by adding that the person and its members or constituents shall be deemed to be two separate persons, an overriding effect has been given to the judgements of any Court, Tribunal or any other authority. It accordingly observed that the decision given by the Hon’ble Supreme Court in State of West Bengal & Ors. vs. Calcutta Club Limited for erstwhile Service tax regime, is no more applicable on account of specific overriding effect over judgments and accordingly held that the applicant is liable to pay GST on Service transactions effected by it with its members.
(Note: After above ruling there is ruling of Hon. Kerala High Court in case of Indian Medical Association vs. Union of India (2025-VIL-338-KER) wherein a different view is taken about application of principle of mutually and may be relevant to see correctness of above ruling)